Creating a Loyalty/Rewards Program for Customers

Lots of views, no posts. Anyone?

I also posted it in another thread but ill say again. I tried to go with a referral program that will give 50% credit to a client who sends me new clients. I'm not quite sure what it is you do but i'm in the service business.

Realistically, discount is like paper money to most people, they usually can't tell if/when it's a good value based on giving discount so i try to avoid that or minimize it to 5-10% if someone buys alot. As you pointed out, another problem with giving discount is future business, they wouldn't want to pay higher and if they refer someone to you, that new person will also want the discounted price that the current client is paying, so it's a mess.

What i try to do with my program, is only target future clients by trying to create a pyramid effect, each one brings someone else and they too have the ability to get lots of free credit by sending more people.

This way (in theory) as long as i can give good service/value to my clients, it will give them a huge incentive to bring their friends. Keep in mind that when i researched the amount other businesses give, the result is usually $10-10% and in some rare cases i've seen a $100 or $200 credit. My prices go from $100-$2000 so 50% credit should be a much better value than those.

Keep in mind that my prices are well below the average price for the same service. So people get a good price without the need for a discount though many people will try just to see if they can get a lower price anyway.

Before you attempt to retain customers that you are losing you first need to understand why you are losing them in the first place. Do they leave because your services are too expensive? Inferior to others? Dislike of staff? Poor location? etc...

Without knowing why customers are leaving you it seems premature to start devising a program designed at keeping them. All you may end up achieving is giving existing customers a discount and not retaining new ones.


Once you know why customers are leaving you it seems like a good time to evaluate what the best course of action is. Perhaps there are other problems that need to be corrected first rather than providing a discount program that may prove difficult to stop, even if it's ineffective (as customers dislike losing those things).

As for attracting new customers that's a whole different story. Are you trying to attract new customers to your service that have never used a service like yours? Steal customers from another similar business? etc... Each of those goals may require a different plan of attack.


On the service many people think "If I give them discounts they will come and keep coming" but in the end that's not always the case. How many people would get their hair cut at a place that does a crappy job but offers a "buy 5 get 1 free" discount?

these days you have to have a rewards/benefits program in place to ensure customer retension